Will State Renegotiate Deal with Foxwoods and Mohegan?

The big political story next week will be the special session called by Governor Malloy to talk jobs. Talk jobs is what we did during a taping of Face the State with State Representatives from Watertown and Waterbury. Republican Sean Williams and Democrat Jeffrey Berger disagree on why there is a special session, but these neighbors agree there is enough common ground to accomplish something. Both agree more will need to be done after the special session.

After Williams and Berger debated the increasingly controversial Jackson Laboratories deal (and you can see them make their points on Sunday) I asked them about an issue the state may have to face sooner than later: casino gambling.

Massachusetts is on its way toward legalizing casino gambling. It’s not a done deal yet, but if Foxwoods and Mohegan Sun get some competition to our north, it could be a big blow to our economy. The Hartford Courant’s Rick Green estimated the loss to the Connecticut casinos at a $1 billion dollars a year.

The argument for casinos in Massachusetts is to keep the estimated $775 million a year Bay Staters gamblers drop in our state every year, in Massachusetts. It is likely gamblers from Vermont, New Hampshire, Maine and parts of Rhode Island would pass on a trek to Connecticut and take the shorter drive to one of the four proposed casinos in Massachusetts.

If the revenue at Foxwoods and Mohegan drops, then so will the amount of money (roughly $350-$400 million annually) that goes into the state coffers. The Mohegans have already seen the writing on the wall, and they are in line to open a casino in Palmer, Massachusetts.

So what can the Malloy administration do? Right now the Mashantucket and Mohegan tribes have a monopoly on casino gambling. According to a deal negotiated by then Governor Lowell Weicker in the 1990s, no one else can open up a casino in the state, and the casinos are required to pay a quarter of their slot revenues to the state. Massachusetts will take 40%. The only option seems to sit down with the tribes, and renegotiate. I asked both Representatives Williams and Berger about that, and they are open to doing that.

Would the state really be able to ask the casinos for a bigger take, when total slot revenues will be lower because of competition from Massachusetts? Or would the state seek to expand casino gambling? Remember, it was less than 20 years ago when Hartford and Bridgeport wanted casinos.

If Massachusetts legalizes casino gambling, it will have an impact on every city and town in Connecticut. It will be interesting to see what our state’s reaction will be.